The price of gold has entered uncharted territory, shattering historical records and propelling shares of mining giant Newmont Mining to extraordinary gains. With the precious metal recently breaching the $5,200 per ounce barrier for the first time, Newmont’s stock has responded in kind, delivering a staggering 218% return over the past twelve months. As euphoria builds, investor focus now splits between an imminent Federal Reserve policy decision and the company’s upcoming earnings report.
Geopolitical Tensions Fuel Safe-Haven Demand
A potent mix of macroeconomic and political factors is driving the historic rally in gold. Spot prices reached an all-time peak above $5,224 on Wednesday, supported by a U.S. dollar hovering near four-year lows. Market observers point to heightened geopolitical uncertainty as a primary catalyst. Proposed tariffs from the Trump administration targeting South Korea, coupled with the threat of a U.S. government shutdown, have accelerated a flight to perceived safe-haven assets. According to Saxo Bank’s Ole Hansen, the uncertainty generated by U.S. policy decisions is the key reason behind this massive shift into hard assets.
For Newmont, the exploding gold price acts as a powerful lever on profitability. This dynamic has not gone unnoticed on Wall Street, where numerous analyst firms have revised their price targets upward. Scotiabank, for instance, raised its target for Newmont by 33% to $152 per share. Furthermore, Deutsche Bank analysts project that gold itself could reach $6,000 per ounce by the end of the year.
All Eyes on the Federal Reserve
In the immediate term, the financial world is fixed on today’s interest rate decision from the U.S. central bank. Markets are pricing in a 95% probability that benchmark rates will remain unchanged. However, the subsequent press conference led by Chair Jerome Powell will be critical. Any signals hinting at potential rate cuts later in 2026 could provide additional momentum for gold and mining equities by reducing the opportunity cost of holding non-yielding assets. Conversely, a hawkish tone from the Fed may temporarily apply the brakes to the current rally.
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Strategic Positioning and Lofty Earnings Expectations
Newmont is scheduled to release its fourth-quarter and full-year 2025 results on February 19. Given that current gold prices are trading far above earlier forecasts, existing analyst earnings estimates may prove conservative. Experts suggest that if these elevated price levels persist, Newmont could achieve earnings per share approaching $10 in 2026.
The company may also find strategic opportunities in the evolving competitive landscape. Rival Barrick Gold’s reported plans to divest certain assets could present options. Through their existing joint venture in Nevada, Newmont might be positioned to increase its influence or acquire valuable operations.
Record trading volumes in gold futures indicate that institutional investors are treating this rally as a sustainable trend. The short-term direction will be influenced by today’s Fed meeting, while the February 19 earnings report will be the ultimate test of whether Newmont’s operational performance can fundamentally justify the market’s heightened expectations.
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